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Cisco Aims to Conquer the Digital Home

With Linksys, KiSS and Scientific-Atlanta under its umbrella, the networking giant can offer everything from the headend to the digital media adapter.


These days, it's no big news that Cisco wants to dominate the digital home. The commercial networking giant began its foray into the living room with the acquisition of Linksys in 2003 ... sort of. While Linksys offered a handful of entertainment-oriented solutions, it really got Cisco only as far as the home office, not the living room.

So in 2005 Cisco (via Linksys) acquired KiSS, a small Copenhagen-based manufacturer of networked DVD players and other convergence products. The acquisition got Cisco into living rooms -- but not many of them.

Finally, Cisco just closed its $6.9 billion acquisition of Scientific-Atlanta, whose cable boxes and modems are found in tens of millions of households.

The acquisition not only gives Cisco instant access to millions of households, it gives the company an infrastructure and ready-made partners (Comcast, Cox, and Time Warner Cable, to name a few) to deliver a wide variety of services to the home.

One of the executives helping to bring it all together is Chris Stevens, a longtime ally of the custom electronics industry. A founder of CEDIA, former integrator, and one-time president of Harman Kardon, Stevens is vice president, Networked Entertainment Business Unit (NEBU) for Cisco-Linksys.

"Linksys wants to be in the CE business with networked entertainment," he says. "You'll see traditional CE form factors like CD players, DVD players and surround sound receivers, but they'll be much more powerful because they're connected to the Internet."

Internet-connected CE devices is nothing new to KiSS. In Denmark, KiSS's MediaMate settop is being used for the country's first IPTV implementation by TV 2 Sputnik, a collaboration between a television network and a media procution group.

In the U.S., Cisco plans to take the IPTV concept beyond the usual TV service and video-on-demand, working aggressively on the content side and the connectivity side. The company will implement a complete entertainment solution from the content to the delivery mechanisms, to the settop box and digital media adapters, to the digital rights management (DRM), according to Stevens.

On top of that, Cisco is developing a user interface that will allow consumers to find content -- whether it arrives via the cable system, Internet, neighborhood network, local DVD, video camera, etc. -- pay whatever price is required, and share.

If it sounds a lot like Microsoft's Media Center Edition, consider that Cisco is better equipped with technology, hardware, and infrastructure -- with Cisco providing enterprise-grade IT products and networking solutions; Linksys contributing lightweight, low-cost consumer networking devices; KiSS offering convergence products and technologies; and Scientific-Atlanta providing millions of captive customers, back-end infrastructure, and intimacy with cable TV.

Furthermore, Cisco is enlisting content providers to build business models around the Cisco ecosystem.

Stevens says, "We've solved the DRM issues. When we meet with the content guys, DRM is not an issue. It's all about the business models. Any way they want to set up subscription services they can."

Stevens foresees the owners of classic TV shows feeding reruns to fans via the Internet. "They could even present The Sopranos as a brand," he says.

Cisco has already plunked down around $100 million into this networked-home initiative, according to Stevens. His boss, chief development officer Charles Giancarlo, said recently that Cisco's consumer business could account for 15-20 percent of revenues in five years. Today, it is about 5 percent of total revenue.

An old friend of the CE pro channel, Stevens says Cisco's networked-home initiative will have something for everyone: "Over time, there will be things that will be interesting to do-it-yourselfers, things for the specialty retailer, and things that will be absolutely thrilling to custom installers. This is a crowd [Cisco] that understands taking products out to the value-added channel."

Cisco's Plans for Home Control


Will Linksys embed Z-Wave in its routers to enable control via the Internet?

In January, Cisco made a "strategic investment" in Zensys, developer of the Z-Wave mesh networking technology for home control. The networking giant is saying little about plans to actually employ the technology in its products. The party line comes from Malachy Moynihan, vice president of engineering and product marketing for the Linksys division of Cisco, who says, "Z-Wave can provide us the flexibility to expand our home control technology offerings to our customers."

At the Consumer Electronics Show, Linksys had a spot in the Z-Wave pavilion, but only showed a single networking device.

A non-Cisco participant in the Z-Wave Pavilion explained that Linksys would most likely use the technology in its routers to enable home control via the Internet.

This is something that Chris Stevens of Linksys knows something about. He is co-founder and chairman of iControl, a provider of Internet-based monitoring and control.




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About the Author

Julie Jacobson, Co-Founder, EH Publishing / Editor-at-large, CE Pro
Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Follow her on Twitter @juliejacobson. [More by Julie Jacobson]

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